Question 1

Additional paid-in capital includes all of the following except

Accepted Answer

A)  paid-in capital from treasury stock. 
B)  paid-in capital in excess of par. 
C)  paid-in capital in excess of stated value. 
D)  paid-in capital in excess of book value. 
A)  paid-in capital from treasury stock. 
B)  paid-in capital in excess of par. 
C)  paid-in capital in excess of stated value. 
D)  paid-in capital in excess of book value.

Question 2

The following items were shown on the balance sheet of Herman Corporation on December 31, 2010:   
Instructions
Complete the following statements and show your computations.
(a) The number of shares of common stock issued was _______________.
(b) The number of shares of common stock outstanding was ____________.
(c) The sales price of the common stock when issued was $____________.
(d) The cost per share of the treasury stock was $_______________.
(e) The average issue price of the common stock was $______________.
(f) Assuming that 25% of the treasury stock is sold at $20 per share, the balance in the Treasury Stock account would be $_______________.

Accepted Answer

(a) The number of shares of common stock

Question 3

Five thousand shares of treasury stock of Meyer, Inc., previously acquired at $12 per share, are sold at $18 per share. The entry to record this transaction will include a

Accepted Answer

A)  credit to Treasury Stock for $90,000. 
B)  debit to Paid-In Capital from Treasury Stock for $30,000. 
C)  debit to Treasury Stock for $60,000. 
D)  credit to Paid-In Capital from Treasury Stock for $30,000. 
A)  credit to Treasury Stock for $90,000. 
B)  debit to Paid-In Capital from Treasury Stock for $30,000. 
C)  debit to Treasury Stock for $60,000. 
D)  credit to Paid-In Capital from Treasury Stock for $30,000.

Question 4

Carson Corporation has the following capital stock outstanding at December 31, 2010:   
The preferred stock was issued at $120 per share. The common stock was issued at an average per share price of $14.
Instructions
Prepare the paid-in capital section of the balance sheet at December 31, 2010.

Accepted Answer

@#IMG-DLM& *15,000 shares × $2

Question 5

The Nice Corporation issues 8,000 shares of $100 par value preferred stock for cash at $110 per share. The entry to record the transaction will consist of a debit to Cash for $880,000 and a credit or credits to

Accepted Answer

A)  Preferred Stock for $880,000. 
B)  Paid-in Capital from Preferred Stock for $880,000. 
C)  Preferred Stock for $800,000 and Retained Earnings for $80,000. 
D)  Preferred Stock for $800,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $80,000. 
A)  Preferred Stock for $880,000. 
B)  Paid-in Capital from Preferred Stock for $880,000. 
C)  Preferred Stock for $800,000 and Retained Earnings for $80,000. 
D)  Preferred Stock for $800,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $80,000.

Question 6

The stockholders' equity section of Ankiel Corporation's balance sheet at December 31, 2009, appears below:   
During 2010, the following stock transactions occurred:
Jan. 18 Issued 50,000 shares of common stock at $32 per share.
Aug. 20 Purchased 25,000 shares of Ankiel Corporation's common stock at $26 per share to be held in the treasury.
Nov. 5 Reissued 9,000 shares of treasury stock for $28 per share.
Instructions
(a) Prepare the journal entries to record the above stock transactions.
(b) Prepare the stockholders' equity section of the balance sheet for Ankiel Corporation at December 31, 2010. Assume that net income for the year was $100,000 and that no dividends were declared.

Accepted Answer

The answer of The stockholders' equity section of Ankiel Corporation's...

Question 7

Paid-in capital from treasury stock would appear on a balance sheet under the category

Accepted Answer

A)  capital stock. 
B)  treasury stock. 
C)  additional paid-in capital. 
D)  contra to owners' equity. 
A)  capital stock. 
B)  treasury stock. 
C)  additional paid-in capital. 
D)  contra to owners' equity.

Question 8

If common stock is issued for an amount greater than par value, the excess should be credited to

Accepted Answer

A)  Cash. 
B)  Retained Earnings. 
C)  Paid-in Capital in Excess of Par Value. 
D)  Legal Capital. 
A)  Cash. 
B)  Retained Earnings. 
C)  Paid-in Capital in Excess of Par Value. 
D)  Legal Capital.

Question 9

Dividends in arrears on cumulative preferred stock

Accepted Answer

A)  are shown in stockholders' equity of the balance sheet. 
B)  must be paid before common stockholders can receive a dividend. 
C)  should be recorded as a current liability until they are paid. 
D)  enable the preferred stockholders to share equally in corporate earnings with the common stockholders. 
A)  are shown in stockholders' equity of the balance sheet. 
B)  must be paid before common stockholders can receive a dividend. 
C)  should be recorded as a current liability until they are paid. 
D)  enable the preferred stockholders to share equally in corporate earnings with the common stockholders.

Question 10

When preferred stock is cumulative, preferred dividends not declared in a period are

Accepted Answer

A)  considered a liability. 
B)  called dividends in arrears. 
C)  distributions of earnings. 
D)  never paid. 
A)  considered a liability. 
B)  called dividends in arrears. 
C)  distributions of earnings. 
D)  never paid.

Question 11

If stock is issued for less than par value, the account

Accepted Answer

A)  Paid-In Capital in Excess of Par Value is credited. 
B)  Paid-In Capital in Excess of Par Value is debited if a debit balance exists in the account. 
C)  Paid-In Capital in Excess of Par Value is debited if a credit balance exists in the account. 
D)  Retained Earnings is credited. 
A)  Paid-In Capital in Excess of Par Value is credited. 
B)  Paid-In Capital in Excess of Par Value is debited if a debit balance exists in the account. 
C)  Paid-In Capital in Excess of Par Value is debited if a credit balance exists in the account. 
D)  Retained Earnings is credited.

Question 12

Kim, Inc. issued 8,000 shares of stock at a stated value of $10/share. The total issue of stock sold for $15 per share. The journal entry to record this transaction would include a

Accepted Answer

A)  debit to Cash for $80,000. 
B)  credit to Common Stock for $80,000. 
C)  credit to Paid-in Capital in Excess of Par Value for $40,000. 
D)  credit to Common Stock for $120,000. 
A)  debit to Cash for $80,000. 
B)  credit to Common Stock for $80,000. 
C)  credit to Paid-in Capital in Excess of Par Value for $40,000. 
D)  credit to Common Stock for $120,000.

Question 13

The chief accounting officer in a corporation is the

Accepted Answer

A)  treasurer. 
B)  president. 
C)  controller. 
D)  vice-president of finance. 
A)  treasurer. 
B)  president. 
C)  controller. 
D)  vice-president of finance.

Question 14

Which one of the following would not be considered an advantage of the corporate form of organization?

Accepted Answer

A)  Limited liability of owners 
B)  Separate legal existence 
C)  Continuous life 
D)  Government regulation 
A)  Limited liability of owners 
B)  Separate legal existence 
C)  Continuous life 
D)  Government regulation

Question 15

A corporation is not an entity which is separate and distinct from its owners.

Accepted Answer

A) True 
 B)False

Question 16

Cole Corporation issues 10,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to

Accepted Answer

A)  Preferred Stock for $600,000. 
B)  Preferred Stock for $500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $100,000. 
C)  Preferred Stock for $750,000 and Paid-in Capital from Preferred Stock for $100,000. 
D)  Paid-in Capital from Preferred Stock for $600,000. 
A)  Preferred Stock for $600,000. 
B)  Preferred Stock for $500,000 and Paid-in Capital in Excess of Par Value-Preferred Stock for $100,000. 
C)  Preferred Stock for $750,000 and Paid-in Capital from Preferred Stock for $100,000. 
D)  Paid-in Capital from Preferred Stock for $600,000.

Question 17

A typical organization chart showing delegation of authority would show

Accepted Answer

A)  stockholders delegating to the board of directors. 
B)  the board of directors delegating to stockholders. 
C)  the chief executive officer delegating to the board of directors. 
D)  the controller delegating to the chief executive officer. 
A)  stockholders delegating to the board of directors. 
B)  the board of directors delegating to stockholders. 
C)  the chief executive officer delegating to the board of directors. 
D)  the controller delegating to the chief executive officer.

Question 18

A company would not acquire treasury stock

Accepted Answer

A)  in order to reissue shares to officers. 
B)  as an asset investment. 
C)  in order to increase trading of the company's stock. 
D)  to have additional shares available to use in acquisitions of other companies. 
A)  in order to reissue shares to officers. 
B)  as an asset investment. 
C)  in order to increase trading of the company's stock. 
D)  to have additional shares available to use in acquisitions of other companies.

Question 19

Paid-In Capital in Excess of Stated Value

Accepted Answer

A)  is credited when no-par stock does not have a stated value. 
B)  is reported as part of paid-in capital on the balance sheet. 
C)  represents the amount of legal capital. 
D)  normally has a debit balance. 
A)  is credited when no-par stock does not have a stated value. 
B)  is reported as part of paid-in capital on the balance sheet. 
C)  represents the amount of legal capital. 
D)  normally has a debit balance.

Question 20

When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the

Accepted Answer

A)  stated value of the stock. 
B)  par value of the stock. 
C)  market value of the stock. 
D)  book value of the stock. 
A)  stated value of the stock. 
B)  par value of the stock. 
C)  market value of the stock. 
D)  book value of the stock.

Exam 13: Corporations: Organization and Capital Stock Transactions

Additional paid-in capital includes all of the following except

Five thousand shares of treasury stock of Meyer, Inc., previously acquired at $12 per share, are sold at $18 per share. The entry to record this transaction will include a

Carson Corporation has the following capital stock outstanding at December 31, 2010: The preferred stock was issued at $120 per share. The common stock was issued at an average per share price of $14. Instructions Prepare the paid-in capital section of the balance sheet at December 31, 2010.

The Nice Corporation issues 8,000 shares of $100 par value preferred stock for cash at $110 per share. The entry to record the transaction will consist of a debit to Cash for $880,000 and a credit or credits to

Paid-in capital from treasury stock would appear on a balance sheet under the category

If common stock is issued for an amount greater than par value, the excess should be credited to

Dividends in arrears on cumulative preferred stock

When preferred stock is cumulative, preferred dividends not declared in a period are

If stock is issued for less than par value, the account

Kim, Inc. issued 8,000 shares of stock at a stated value of $10/share. The total issue of stock sold for $15 per share. The journal entry to record this transaction would include a

The chief accounting officer in a corporation is the

Which one of the following would not be considered an advantage of the corporate form of organization?

A corporation is not an entity which is separate and distinct from its owners.

Cole Corporation issues 10,000 shares of $50 par value preferred stock for cash at $60 per share. The entry to record the transaction will consist of a debit to Cash for $600,000 and a credit or credits to

A typical organization chart showing delegation of authority would show

A company would not acquire treasury stock

Paid-In Capital in Excess of Stated Value

When stock is issued for legal services, the transaction is recorded by debiting Organization Expense for the

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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